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RN Retirements--Tsunami Warning!

By Peter McMenamin posted Mar 14, 2014 4:16 PM

  

2022: Where Have All Those Nurses Gone?


Near the end of 2013 the U.S. Department of Labor Bureau of Labor Statistics (BLS) updated its
Employment Projections for 2012-2022.  (The previous projections spanned 2010-2020.)  Over that timeframe the health care and social assistance sector is now projected to grow at an annual rate of 2.6 percent, adding 5.0 million jobs and accounting for nearly one-third of the total projected increase in jobs. By 2022 total employment of RNs and APRNs will increase by 574,400 jobs.  In fact, with RN retirements also in the mix, the nation will need to have produced 1.13 million new RNs by 2022 to fill those jobs.  There is also some chance the retirement estimates are too low.  However, even if the BLS projections of retirements are reasonably close and Title VIII funding remains available and continues to support the education of more new RNs, there are a number of other issues that must be addressed to avoid the return of a catastrophic nurse shortage.

Background

Below I’ve excerpted one of my Title VIII history graphs documenting the 1964-1996 changes in nurse education funding and subsequent changes in new nurses entering the profession.  The two series in this graph track annual funding for Title VIII and also reproduce some of the numbers from the story developed and told in Health Affairs by Auerbach, Buerhaus, and Staiger (2011) about the ups and downs in the number of new nurses entering the profession in the United States.

 

 

Title VIII of the U.S. Public Health Services Act is the legislation that covers nursing education and practice. Originally referred to as the Nurse Training Act, Title VIII was added to the Public Health Service Act in fiscal year 1964, initiated with funding at $9.9 million. This Act was a response to a 1963 report of the Surgeon General’s Consultant Group on Nursing. The report, Toward Quality in Nursing, Needs and Goals, anticipated a shortage of nurses and recommended that the supply of nurses be increased from a total of 550,000 professional nurses in practice, to a total of 850,000 by 1970. Funding jumped in successive years from about $10 million to $20 million to $40 million to $65 million.  For the next five years, however, Title VIII funding bounced around in the vicinity of $65 million. 

Funding changed markedly due to the Comprehensive Health Manpower Training Act of 1971.  With respect to nursing education the 1971 Act virtually doubled Title VIII funding (98.9% increase) from FY71 to FY72.  Another $22.6 million was added in FY73.  It would be 36 years (2009) before Title VIII funding returned to and exceeded the FY73 level.  In the decade from 1972 to 1981 Title VIII funding was as low as $80 million for a single year and for most years in that decade annual funding was $106 million or higher.  Following that decade and extending through to FY2000 average Title VIII funding was $58.4 million, a significant fall back in resources available for the education of registered nurses.

One observes that (with a lag of several years) the changes in Title VIII funding were followed by changes in the numbers of new RNs entering the profession—both going up and going down.  Data from the U.S. Census Current Population Survey and, more recently, the American Community Survey confirm that with the increase in RN education funding there was a subsequent increase in new RNs completing their education, passing the NCLEX, and entering the professional.  Using those data and focusing on RNs ages 23-26—“young nurses”—in each year from 1978 to 1987 the number of young nurses in practice in any year was no less than 159,000.  On each side of that decade there were substantially fewer young nurses in the profession.

There were a few other things going on at the time, most notably the Women’s Liberation Movement.  Even into the mid-1970s the primary occupations outside the home most likely to be pursued by well educated women were teacher, nurse, and librarian.  In fact, in 1970 97.3% of RNs were female.  Women’s Lib had started in the 1960s, but by the late 1970s women in substantially much larger numbers were becoming lawyers and computer programmers, chemists, biologists, and mathematicians, university professors and business executives.  In part because of this increase in alternative opportunities for women, fewer women chose to earn nursing degrees.  Title VIII funding declined and the level of young nurses in the profession dropped below 120,000, and, for the most part, remained at that level through 2005.  (This was not a result of there being fewer young adults. In 1946 the number of U.S. births jumped 19% over the prior year and it has remained at or above that level except for a brief and minor respite during 1972-1978.)

The result of the increase and then decline of funding for nurse education was a unique “Title VIII super-cohort” of RNs that established, defined, and remained the plurality age category of nurses over the last 40 years.  The core members of this cohort were born between 1951 and 1959.  The last National Sample Survey of Registered Nurses from 2008 documented the progression of this super-cohort over the course of five of the eight quadrennial surveys.


Source: U.S. Department of Health and Human Services, Health Resources and Services Administration (2010). The Registered Nurse Population: Initial Findings from the 2008 National Sample Survey of Registered Nurses.

Among the five year age categories specified for the Surveys, that unique core group of nurses—particularly those born between 1953 and 1957—populated the plurality age category in 1980, 1988, 1996, 2004, and 2008.  They have been the proverbial “pig in the python.”  In 2014, however, they are approaching the tail end of the snake.  RNs born in 1951 are now 63; those born in 1959 are or soon will be 55.  Retirement beckons.  Many nurses older than 63 and still in practice are believed to have been deferring retirement due to the recession.  RNs in that 1951-1959 birth cohort have also been or have begun deferring retirement.

The elevated Title VIII funding levels lasted approximately one decade and returned to the previous level.  The resulting expansion in the number of new RNs also lasted about one decade, returning to the previous level.  As a result, when that super-cohort of nurses retires, the following RN cohorts cannot “move up” in sufficient numbers to replace all of the retirees.  There currently are more new RNs graduating from nursing programs than had been observed in the early 2000’s but likely not in sufficient numbers to immediately make up the difference.

Warning: Tsunami Ahead!

There are some signs emerging to indicate how quickly this tsunami of retirements may occur.  In October 2013 the staffing firm AMN released its 2013 survey of Registered Nurses, Generation Gap Grows as Healthcare Transforms.  The sample size for that survey would not guarantee much robustness, but the general tenor of the responses did not suggest a biased sample.  With respect to respondents’ plans for the future, 23% of those ages 55 or older indicated they would be retiring or switching to part time employment “in the very near future.”  That would indicate 187,200 would retire or switch to non-nursing jobs with another 81,900 switching to part-time nurse employment for a total of 269,100 RNs leaving full time employment as RNs.  A lot of nurses but perhaps with some wiggle room on time.

More recently, the Bureau of Labor Statistics issued the update of its Occupational Employment Projections  from 2012-2022.  With respect to RNs and APRNs those projections are documented in the table below.

 

The top five data rows in the table display the projections for RNs and APRNs.  In the middle of the table one can observe that the total employment of RNs is projected to increase from 2,711,500 jobs in 2012 to 3,238,400 jobs in 2022.  This is an increase of 526,800 RN jobs.  What is also very interesting in that section of the table is the third column from the left, “Replacement needs.”  Those numbers indicate the projected number of replacements needed to fill jobs vacated by RNs projected to leave the profession and/or retire from the labor force, viz., 525,700.  As a result, the total number of additional RNs needed to fill the jobs becoming available through 2022 is 1,052,600.  Because of the retirements, the projected number of registered nurses needed to fully staff healthcare industries is virtually double the number of increased jobs due to expanded demand from new patients wanting new services.

In 2013 BLS began publishing separate estimates of jobs with respect to CRNAs, CNMs, and NPs.  Their individual projected job openings are also listed in this table.  In the final row in the RN set the entries for both RNs and APRNs have been aggregated.  BLS projects a gross increase in job openings for RNs and APRNs combined of 1,129,600.

Surviving the Transition

555,100 sets of retirement papers will not be submitted simultaneously.  They can be expected to be distributed and accelerating over the years from now until the end of 2022.  Similarly, the increased demand for RNs and APRNs will also grow over the years.  With some luck, the retirements and increased demands will balance with the education of new RNs and their entry into the profession.  Over the ten year projection timeframe, the average annual need for new nurses will come to about 113,000 per year.  From 2009 to 2013, average production has been roughly 140,000 new NCLEX passers per year.  What could go wrong?

Scrolling back up to the projections table, there is a separate row for projections for nursing instructors and teachers.  BLS projects that there will need to be 35% more faculty members to meet the expected increase in demand.  In addition, 10,200 current faculty members are expected to retire.  Therefore 34,200 new nursing instructors will be needed by 2022.  Could the collected colleges of nursing recruit 3,420 new nursing instructors per year through 2022?  There are several challenges here.  (If nothing else, nurses recruited into teaching will spend less time treating patients when more nurses in patient care will be needed.)  There is also a new focus on strengthening the education of RNs, in particular, aiming to increase the proportion of RNs with a BSN education.  Those colleges of nursing that are part of universities are also under some pressure to enhance their staffs by recruiting more faculty members with doctorates.  Finding more faculty members and more with a doctorate will be a challenge at today’s faculty salaries.  BLS estimated that in May 2012 average salaries for nursing instructors were $68,640.  This was close to the average salary for all RNs, $67,930.  At the same time, average salaries for certified nurse-midwives and nurse practitioners were more than $91,000.  CRNAs’ average was $154,390.  Expanding the faculties of nursing colleges will require a commitment to improve compensation.  (Expanding the available clinical rotations for BSN programs will also require additional commitment and funding.  The dimensions of that piece of the puzzle are not as well known.)

It might help in the search for additional well-educated faculty if Title VIII support for additional faculty education were maintained or increased.  In fact, part of the particular upcoming transition situation is due to the ups and downs in Title VIII funding for general nurse education.  The graph below depicts the complete history of Title VIII funding from 1964 onward and projected through the end of FY2014.  The blue line represents the nominal funding; the red line is Title VIII funding adjusted for inflation (with a base year of 1964). 

The nominal data are somewhat encouraging.  Support for nurse education has expanded since the turn of the century.  But when one looks clear-eyed at the inflation adjusted path of funding in the U.S., inflation has eaten away 74 percent of commitment expressed in 1973. 

 

 

If sufficient well qualified applicants continue to seek and obtain a nursing education and the faculty and funding issues get resolved we may still not be out of the woods; the nation will still be heavily reliant on nurses who entered the profession in the 1980s.  Even with 555,100 RNs leaving the labor force by 2022 there may still be approximately 450,000 RNs in the Title VIII super-cohort who remain in practice.  However, in 2022 those RNs will all be 64 years of age or older.  The vast bulk of those RNs will not remain in active practice for another decade.  Those additional 450,000 sets of retirement papers will be filed much more quickly than those of their retired super-cohort predecessors.  Replacing retiring RNs may be a major fact of life for hospitals and other health industry employers through 2030. 

Recently hospitals appear to have slowed down in hiring to only a replacement level.  Total hospital employment declined three straight months from December 2013 to February 2014.  The last time such a slowdown occurred was in 1995.  We currently are in a period of mixed signals—simultaneous stories about both general staff layoffs and new job searches by employers, particularly looking for RNs.  Because of the deferred RN retirements hospitals have been able to be more discriminating in selection of RNs to hire.  Some hospitals have advertised that they will only hire BSN or advanced degree nurses.  Some hospitals have indicated that “no ‘new grad’ nurses need apply.”  A preference for experienced nurses is understandable, but there may be unintended consequences.  As RN retirements begin to accelerate there may be many more suitors for experienced nurses.  Hospitals should consider more open employment of new grads so that they can grow their own experienced nurses over the next few years. Increasing demand for health care is expected to continue.  The additional health insurance coverage offered by the Affordable Care Act may have leveled out by 2020, but the aging into Medicare of Baby Boomers and subsequent generations will continue.  Every year through the end of the 21st Century two to three million people will age-in to Medicare.  Hospitals and other health industry employers need to be prepared.  All health industry employers need to plan a long term strategy that starts today for developing and retaining a stable, loyal, and home-grown, increasingly experienced RN staff.

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Mar 26, 2014 5:17 PM

This is critical information that Dr.McMenamin is providing for us. The healthcare industry for decades has precipitated nursing shortages by living in the "there are enough nurses now, why worry" scenario. And, when a shortage occurs, the same industry bemoans why there are not enough nurses! We must SHOUT out to the industry this tsunami-retirement information and demonstrate why there must be places for "new grads", now, and not wait until tomorrow when the seasoned nurses claim their well-deserved retirements. Keeping a stable nursing workforce takes vision, effort and commitment by the health care industry. It needs to invest in recruiting, nurturing, and retaining nurses as a vital resource. It is and will not be easy to change the industry's understanding of its nursing workforce, but without this change, health care will not have the numbers of appropriately prepared nurses that will be so desperately needed. ANA should take Dr. Peter McMenamin and his information to every major health care industry meeting!!!
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